The party's name has sometimes created confusion with the Women's International League for Peace and Freedom, an international anti-war organization. While many Peace and Freedom Party members are also members of WILPF, the two organizations are not affiliated with each other and have no historical connection.

The Peace and Freedom Party grew out of the widespread unhappiness with the Democratic Party's support for the war in Vietnam and failure to effectively support the civil rights movement. The party achieved ballot status in California at the start of 1968 by registering over 105,000 voters under its banner. It later got ballot status in 13 other states, but in most of those the election laws and small organization meant that it was unable to retain ballot status after 1968.

In 1966, three men ran for the U.S. House on the Peace & Freedom Party label. Herbert Apetheker received 3,562 votes in New York's 12th Congressional District; Robert B. Shaw received 1,974 votes in Washington's 7th Congressional District; and Frank L. Patterson received 1,105 votes in Washington's 2d Congressional District.

The PFP's first national convention to nominate candidates for President and Vice President was held in Ann Arbor, Michigan on August 17-August 18, 1968. Eldridge Cleaver was nominated for President over Richard C. "Dick" Gregory by a margin of 161.5 to 54. Cleaver, a convicted felon and Black Panther spokesman, was technically not eligible to run since he was only 34 years old at the time. Due to the needs of the state parties to collect signatures, the party fielded several different vice presidential nominees, including Chicago activist Peggy Terry, [FNU] Gonzalez, economist Doug Dowd, and Judith Mage, who had been nominated at the national convention. Cleaver personally preferred Yippie leader Jerry Rubin. Gregory formed a competing Freedom and Peace party and ran separately. Two states (California and Utah) refused to list Cleaver on the ballot, although each state listed the Presidential Electors and candidates for Vice President (Terry in California and Gonzalez in Utah).

A variety of people joined the PFP in its first election. Bob Avakian was a spokesman for the party in the San Francisco Area. The New York Peace and Freedom Party consisted of a fractious coalition of competing Marxist groups along with libertarians led by Murray Rothbard. Libertarians briefly took over the California branch of the party as well.

In the election of 1968, the PFP fared fairly well for a new third party. Gregory outpolled Cleaver, receiving 47,097 votes to Cleaver's 36,623. In California and Utah, where no presidential nominee appeared on the ballot, the voters cast 27,887 votes for the PFP. The full nationwide vote for Presidential Electors was thus 111,607. PFP candidates for the U.S. Senate garnered an aggregate nationwide total of 105,411 votes. The PFP gained ballot access in California, which it retained except for the brief period 1999-2003.

After 1968, the PFP affiliates in most states dissolved, with the California party as the primary exception. Throughout the 1970s, the California party continued to contest local elections but endorsed the national candidates of the left-wing People's Party. In 1972, the People's Party nominated the democratic socialist and anti-war activist Benjamin Spock for President, and in 1976 it nominated Margaret Wright of California for President.

In 1998, the PFP failed to attain more than 2% of the votes, causing them to lose ballot status in the state. Their position on the ballot was restored in 2003 after a voter registration drive, and a candidate the party considers to be a framed political prisoner and important Native American activist, Leonard Peltier, was chosen as the party's 2004 presidential candidate at the August 2004 State Convention. Peltier’s candidacy was criticized by those outside the party that believe that Leonard Peltier is a murderer.

Also, in 2004, former Peace and Freedom party leader, Steven Argue, split from the party citing opposition to their support for the Democratic Party (United States) and Green Party (United States) in local elections as well as differences on the issue of the UN in Iraq. He is now the editor of Liberation News (Internationalist).

The party again fell under the required number of registered voters in February 2006, and was declared disqualified by California Secretary of State. However, citing previous instances in which parties not meeting the 'ballot qualification' criteria were still allowed to participate in primary elections, and the fact that there had not yet been a regular gubernatorial election since the party regained its ballot status (and as such, the decision was premature), the decision to bar the party from the June 2006 Primary was reversed after less than a week.